Why Sustainability Makes Good Business Sense

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You’ve likely heard of business “going green.” From installing solar panels on rooftops, utilising recycling bins, and switching off lights after hours, there are a number of ways both employers and employees can adjust their behaviour to operate in an environmentally responsible way.

But that’s just one part of building a sustainable business. Along with environmental well-being, it’s also about social impact and economic viability. This could include skills training for employees, and improving the quality of life in the communities in which you operate in.

Sustainability at What Cost?

There’s often a misconception that sustainability initiatives are expensive and will erode profits. On the contrary, it has shown to be beneficial for business owners from the bottom-line up.

Using the example of Egyptian agri-business SEKEM, that used biodynamic agricultural methods to start Egypt’s first organic farm in the middle of the desert forty years ago, a Harvard Business Review article titled ‘Making Sustainability Profitable’ offers three approaches for companies  to ensure their environmental efforts pay off financially:

  • Many, like Sekem, took a long-term view, investing in initially more-expensive methods of sustainable operation that eventually led to dramatically lower costs and higher yields.
  • Others have taken a ‘bootstrap’ approach to conservation: they started with small changes to their processes that generated substantial cost savings, which they then used to fund advanced technologies that made production even more efficient.
  • Some have spread their sustainability efforts to the operations of their customers and suppliers, in the process devising new business models that competitors find hard to emulate.

You don’t need to incur high costs upfront, but rather adopt a model that works with your available resources, and adapt it to your sector.

That’s exactly what AccorHotels set out to do when they launched their internal sustainability management system, dubbed Charter 21, which recommends over 60 actions hotels can take to reduce their environmental footprint.

The French hotel chain group, that operates in over a dozen African countries, commissioned two independent studies to assess the financial return on a number of their sustainability initiatives. The first study focused on the corporate social responsibility expectations of the hotels’ B-to-B customers, while the second provided a statistical analysis of the influence of several sustainable development indicators on profitability and guest satisfaction. Both revealed that the more a hotel invests in initiatives that reduce their environmental footprint, the more positive its paybacks are, both in terms of (1) reducing costs of water and energy for example, and (2) increasing revenues partly due to enhanced reputation and guest satisfaction.

Other key takeaways:

  • Sustainability should not be viewed as a cost to the business.
  • Highly visible sustainability initiatives can be a very effective way to differentiate a company in the minds of customers and strengthen customer relationships.
  • Formal programmes that include specific, measurable objectives and a framework for managing progress towards achieving them are critical to making sustainability a core part of doing business.

Another core part is getting the buy-in from staff members. One of the key actions of AccorHotels’ Charter 21 is training employees in environmentally friendly practices.

Fostering a Culture of Sustainability

By encouraging employees to follow sustainable practices, it could soon become a norm that has a lasting impact in the workplace and in their private homes. Think about something as simple as using energy-saving bulbs at office desk lamps, or utilising reusable glass instead of plastic cups at the water cooler. Consider the possible knock-on effect if this results in a conscious behavioural change where the employee now turns the household water geyser off when not in use, or ploughs biodegradable kitchen scraps back into the garden instead of disposing as waste.

It’s this way of sustainable thinking that lead a turtle conservationist at Cape Town’s Two Oceans Aquarium to start an eco-rooftop garden. Initially meant to feed the facilities’ green sea turtles, it soon evolved into a lush garden of waterwise indigenous plants and herbs that is shared among employees. Not a drop of water is wasted here, with the vegetation being nurtured by the condensation from nearby air conditioners. The sustainable rooftop garden now also functions as an oasis for employees during break time complete with recycled artwork, and a worm farm that feeds off lunch scraps which in turn becomes fertilizer that can be ploughed back into the garden.

Nurturing Community-Based (Business) Partnerships

Sustainability relates to the future of your company and the broader community. Consider the impact of procuring goods and services from local businesses, or spreading your sustainability efforts to the behaviour of your suppliers and customers.

Kenya-based ICOSEED (Integrated Community Organisation for Sustainable Empowerment and Education for Development) have successfully nurtured a mutually-beneficial relationship with local farmers. Winner of the 2017 SWITCH Africa Green-SEED Awards, they buy banana stems from farmers, process it into balls of fibre, and then use them to produce (biodegradable) products such as bags and table mats. They even take it a step further by giving the by-product (slurry) back to the farmers to use for biogas or compost. ICOSEED factors in all three key tenets of sustainability in that they’ve accounted for environmental well-being by producing environmentally friendly products and promoting the use of slurry for compost and biogas digesters; social impact by providing job opportunities for stem transporters and extractors along with an alternative source of income for hundreds of farmers; and economic value.

The company now plans to Increase the number of farmers supplying banana stems from 400 to 9,000 by 2018, scale up the production capacity of banana fibre by buying new machinery, diversify the product range, and establish two new production sites in key banana growing areas.

ICOSEED has adopted a sustainability model that works with their available resources. They’re now able to reap the rewards by funding the advanced technologies that will increase their production efficiency, while also spreading their sustainability efforts to the operations of their suppliers. They encapsulate the ideal of a sustainable business, where environmental well-being, social impact and economic viability are obtained, demonstrating that sustainability indeed does make good business sense.


Photo Credits:

AQUARIUM: Two Oceans Aquarium – www.aquarium.co.za

SEKEM: www.sekem.com

ICOSEED: https://www.facebook.com/www.icoseedkenya.org/

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